United States v. Travelers Casualty & Surety Co.

CourtDistrict Court, M.D. Florida
DecidedNovember 12, 2021
Docket3:21-cv-00614
StatusUnknown

This text of United States v. Travelers Casualty & Surety Co. (United States v. Travelers Casualty & Surety Co.) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Travelers Casualty & Surety Co., (M.D. Fla. 2021).

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

UNITED STATES OF AMERICA f/u/b/o AMERICAN ELECTRIC COMPANY, LLC,

Plaintiff,

v. Case No. 3:21-cv-614-MMH-JRK

TRAVELERS CASUALTY & SURETY CO., ZURICH AMERICAN INSURANCE CO., and FIDELITY AND DEPOSIT COMPANY OF MARYLAND,

Defendants. /

ORDER THIS CAUSE is before the Court on The Haskell Company’s Motion to Intervene Pursuant to Rule 24, Federal Rules of Civil Procedure and Supporting Memorandum of Law (Doc. 14; Motion to Intervene), filed on August 26, 2021. Plaintiff, United States of America for the use and benefit of American Electric Company, LLC (AEC), timely filed a response in opposition to the Motion to Intervene. See United States of America f/u/b/o American Electric Company’s Opposition to The Haskell Company’s Motions to Intervene and Compel Arbitration and to the Sureties [sic] Motion to Stay Proceedings (Doc. 20; Response), filed September 8, 2021. With leave of the Court, The Haskell Company (Haskell) filed a reply to the Response on October 5, 2021. See Proposed Intervenor, The Haskell Company’s Reply to United States of America

f/u/b/o American Electric Company’s Opposition to The Haskell Company’s Motions to Intervene and Compel Arbitration (Doc. 25; Reply). Accordingly, this matter is ripe for review. I. Background

In 2016, Haskell entered into a contract with the United States Coast Guard to be the general contractor on a construction project at the National Security Cutters Homeport at the U.S. Coast Guard Base in Honolulu, Hawaii (Project). See Motion to Intervene, Ex. A: Order for Supplies or Services (Doc.

14-1). In accordance with the Miller Act, 40 U.S.C. § 3131 et seq., Haskell posted a payment bond with Travelers Casualty & Surety Company of America, Fidelity and Deposit Company of Maryland, and Zurich American Insurance Company (collectively, “Surety Defendants”). See 40 U.S.C. § 3131(b)(2)

(“Before any contract of more than $100,000 is awarded for the construction, alteration, or repair of any public building . . . a person must furnish . . . . [a] payment bond with a surety . . . for the protection of all persons supplying labor and material in carrying out the work . . . .”); Motion to Intervene, Ex.

C: Payment Bond (Doc. 14-3; Payment Bond). Pursuant to the terms of the Payment Bond, the Surety Defendants and Haskell are jointly and severally liable for payment of the full amount guaranteed. See Payment Bond at 2. Nevertheless, Haskell represents that it has agreed to indemnify the Surety Defendants for any liability incurred on the Payment Bond. See Motion to

Intervene at 2–3. In 2017, Haskell entered into a subcontract agreement with AEC for AEC to perform work on the Project. See Motion to Intervene, Ex. B: Subcontract Agreement (Doc. 14-2; Subcontract). The Subcontract includes a binding arbitration provision for disputes between Haskell and AEC. See

Subcontract at 23–25. AEC commenced this action on June 18, 2021, by filing suit under the Miller Act against the Surety Defendants. See Federal Miller Act Complaint (Doc. 1). In its amended complaint, filed July 6, 2021, AEC alleges that it is

entitled to recover from the Surety Defendants on the Payment Bond because Haskell did not pay AEC everything due under the Subcontract or pay AEC for extra work and increased costs caused by Haskell’s actions. See Plaintiff, United States of America f/u/b/o American Electric Company, LLC’s Amended

Federal Miller Act Complaint (Doc. 5; Complaint) ¶¶ 14, 16, 18, 20, 23–24, 32– 36. On August 26, 2021, Haskell filed the Motion to Intervene, in which it seeks to intervene in this action as a matter of right under Rule 24(a)(2) of the Federal Rules of Civil Procedure (Rule(s)) or, alternatively, for permissive intervention

under Rule 24(b)(1)(B). Motion to Intervene at 8, 12; see Fed. R. Civ. P. 24(a)– (b). Haskell represents that it seeks to intervene to compel arbitration of the dispute with AEC as required in the Subcontract. Motion to Intervene at 13. Haskell further asserts that, if the Court does not compel arbitration, Haskell will seek to assert a counterclaim against AEC for damages allegedly caused by

AEC’s actions on the Project. Id. Seeking to satisfy the requirements of Rule 24(c), Haskell attached to its Motion to Intervene a motion to compel arbitration, which it also filed on the Court’s docket in this case. See Motion to Intervene, Ex. D (Doc. 14-4); The

Haskell Company’s Motion to Compel Dispute Resolution and Arbitration and Stay Action Pending Arbitration and Supporting Memorandum of Law (Doc. 15; Arbitration Motion). While AEC opposes the Motion to Intervene, the Surety Defendants have consented to it and also moved to stay the proceedings pending

completion of the arbitration. See Motion to Intervene at 14; Defendants, Travelers Casualty & Surety Co., Zurich American Insurance Co., and Fidelity and Deposit Company of Maryland’s Motion to Stay Pending Resolution of Arbitration and Supporting Memorandum of Law (Doc. 16; Motion to Stay

Pending Resolution of Arbitration), filed August 26, 2021. In addition, the Surety Defendants have moved to stay all pending case deadlines until the foregoing motions are resolved. See Defendants, Travelers Casualty & Surety Co., Zurich American Insurance Co. and Fidelity and Deposit Company of

Maryland’s Motion to Stay All Pending Deadlines, or in the Alternative, for Enlargement of Time to Conduct Case Management Conference and File Case Management Report (Doc. 24; Motion to Stay Pending Deadlines), filed September 30, 2021. AEC timely responded to the Motion to Stay Pending Deadlines. See Plaintiff’s Opposition to the Defendants’ Motion to Stay All

Pending Deadlines, or in the Alternative for Enlargement of Time to Conduct Case Management Conference and File Case Management Report (Doc. 26; Response to Motion to Stay Pending Deadlines), filed October 11, 2021. The Surety Defendants have not yet answered AEC’s Complaint, the Court has not

issued a scheduling order, and it does not appear that any discovery has occurred. II. Legal Standards Rule 24 recognizes two paths for a non-party to intervene in a federal

action: intervention as of right and permissive intervention. In re Bayshore Ford Trucks Sales, Inc., 471 F.3d 1233, 1246 (11th Cir. 2006). The Eleventh Circuit Court of Appeals has described the burden on a party seeking to intervene as of right pursuant to Rule 24(a)(2) as follows:

A party seeking to intervene as of right under Rule 24(a)(2) must show that: (1) his application to intervene is timely; (2) he has an interest relating to the property or transaction which is the subject of the action; (3) he is so situated that disposition of the action, as a practical matter, may impede or impair his ability to protect that interest; and (4) his interest is represented inadequately by the existing parties to the suit.

Chiles v. Thornburgh, 865 F.2d 1197, 1213 (11th Cir. 1989). Once a party establishes all of the prerequisites to intervention as a matter of right, “the trial court has no discretion to deny the intervention.” Loyd v.

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